Nigeria is one of the world’s largest producers of crude oil which supposes that kerosene, a by-product, predominantly used by millions of our people as the cheapest energy for domestic cooking, suddenly became a scarce commodity as the price went beyond the reach of most ordinary citizens.
Kerosene was once deregulated by the administration of Chief Olusegun Obasanjo when he was the country’s president from 1999 to 2007. Later it was regulated making the Nigerian National Petroleum Corporation, NNPC the sole importer bringing the product at a landing cost of about N130 per litre but supplies at N40.90 per litre yet the end users pay out-rightly at double or triple this price.
Under the government of late President Musa Yar’Adua, a regime of subsidy on petroleum products was introduced especially involving Petrol or Premium Motor Spirit,PMS for the benefit of Nigerians. The Federal Government spent billions of naira in ensuring that petrol is available at affordable price to motorists and public transport operators. Although at high cost to government, subsidy has helped tremendously to stablisise the socio-economic system and removed incessant fuel scarcity in the country, not withstanding the massive fraud and corruption by the marketers.
However, governor of the Central Bank of Nigeria, CBN, Sanusi Lamido Sanusi, opened a can of worms, when he described kerosene subsidy as illegal, saying it is a racket.
He affirmed that kerosene is not a subsidised product, citing a data of the Nigerian Bureau of Statistics, producing evidence that late President Yar’Adua issued a presidential directive removing subsidy payment as from July 2009.
Appearing before the Senate Committee on Finance, Sanusi said that the burden of proof on NNPC is to show where they obtained authorisation to purchase kerosene at N150 per litre from Federation funds and sell at N40 per litre, knowing full well that this product sells in the market at N170-N220 per litre. He asked at what point was the presidential directive reversed.
Earlier he had asserted that out of the $67 billion that has accrued to the NNPC account, $47 billion have been accounted for. Out of the $67 billion that the NNPC shipped, $47billion had been repatriated to the CBN. What to be accounted for yet is the balance of $20 billion which NNPC claimed was on kerosene and fuel subsidy, through a scheme known as Kero-Direct initiated in July 2011 to assist in the distribution of household kerosene (HHK) to consumers across the country.
The Corporation denied knowledge of the presidential directive stopping kerosene subsidy.
It was discovered that kerosene was available only at the 36 NNPC mega stations out of over 24,000 retail outlets across the country. Because of massive diversion of the product, consumers are paying for kerosene at between N140 and N150 per litre.
A house wife, Mrs. Catherine Ennih, lamented the plight of consumers who are compelled to buy the product at N150 in most filling stations particularly along Lagos/Badagry Expressway.
“I reside at Ijanikin and all the petrol stations around always display a signboard saying: “No kerosene.” As a result, often times we go to private retailers either in their homes or shops to buy kerosene some times as high as N175 per litre. But we understand it should be sold at N50. You can never get the product at that price. Who are they deceiving,?”
According to her, government should look at the kerosene matter with all seriousness as many people use the product for cooking at home.
“I am afraid of gas because it is highly inflammable and I have little children in the house who could tamper with gas cylinders and could cause fire due to leakage. If the government ensures appropriate pricing of the product based on subsidy as applicable to petrol, then the masses will be happy with President Jonathan.”
Another woman, a trader in Agbara, Madam Josephine Okome said government should come to the rescue of the common people by establishing NNPC mega stations in more towns and cities.
“We need an NNPC station in Agbara. These other filling stations are ripping consumers off. Many housewives are going into the forest to fetch firewood for cooking and thereby cutting down trees while government is mounting campaign to plant more trees to protect communities.”
Sanusi had revealed in a reported presentation on kerosene that the Nigerian Ports Authority, NPA records suggest that NNPC imports about four to six vessels of kerosene a month, of which the value of each vessel is put at $30 million and the amount of subsidy per vessel is N20m. By this estimate, at an average of five vessels a month, the federation account loses $100m every month to this racket.
An energy analyst, Mr. Tokunboh Asaju said government must act fast to get to the root of this racket and confirm if the CBN governor is actually correct. “Our people are fed up with reports of such scams that tend to short change the interest of the ordinary people. What supposed to be subsidy relief for kerosene consumers had become misery and nightmare. the implication is increased hardship and suffering for the people.” He called for full investigation of the kerosene racket to ascertain what has happened.